Get Ahead of the Tax Game: 3 Tips to Minimize Your Liability and Win Big

Get Ahead of the Tax Game: 3 Tips to Minimize Your Liability and Win Big

Do you remember playing La pirinola with your neighbors? If the answer is yes, then that means it’s time to do your taxes! Oop, sorry not sorry.

If you know us, you know we are all about making dinero fun, so welcome to the 2023 Pirinola Tax Tournament!  With the right tactics and planning, you can maximize your deductions and credits, minimize your tax liability, and come out on top. Enough waiting around because the April 18th deadline is around the corner!!

Here are 3 strategies to optimize your tax strategy and become a Tax master! In this game, we are rooting for you to get “Toma 10” and not “Nada.” You got this!

1. Dinero Deductions are Your BFFs

One of your main goals is to identify all the deductions you’re eligible for and claim them on your tax return. Remember, deductions are expenses that can be subtracted from your taxable income. Some common deductions include:

  • You Paid it Forward: If you donate to a qualified charity, you may be able to deduct the value of your donation from your taxable income.
  • Mortgage interest: If you own a home and have a mortgage, you can deduct the interest you pay on your mortgage from your taxable income. 
  • Medical expenses: If you have significant medical expenses, you may be able to deduct them on your tax return. 

Always make sure you keep accurate records of all the expenses you’re claiming as deductions. And of course, if you’re unsure whether an expense is deductible, always consult with a tax professional. Like the saying goes “El que no habla, Dios no lo oye” 

2. Do the Credit Champion Combo

In this Credit Combo, the goal is to identify and claim all the tax credits you’re eligible for. Tax credits directly reduce the amount of taxes you owe. Some common tax credits include:

  • Earned Income Tax Credit (EITC): A credit for low-to-moderate income workers that can be worth up to $3,417 for the 2022 tax year. Any help sent from the virgencita is a blessing.
  • Child and Dependent Care Credit: A credit for expenses related to the care of a child or dependent. It can be worth up to $3,000 for one qualifying individual or $6,000 for two or more qualifying individuals. Clap if you’re happy and you know it after hearing this information. *clap* *clap*

American Opportunity Tax Credit: A credit for higher education expenses, worth up to $2,500 per eligible student. If you’re a student, ponte las pilas and double check if you qualify!

3. Live Up to the Ahorrador Automator Title

In order to win this game, you have to take as many opportunities as you can. By streamlining your tax planning for future years is sure to get you there. 

One way to do this is to automate your finances. This can involve:

  • Setting up direct deposit for your paycheck and other income sources. Okay, side hustle king/queen!
  • Automating contributions to your retirement accounts, such as a 401(k) or Roth IRA and maxing them out. AY! We love the sound of that.
  • Using software or apps to track your expenses and monitor your budget. And hey, if you haven’t heard, SUMA can help you keep a budget and all your finances in order. Check out our App HERE. You’re welcome chic@!

If you commit to automating your finances, you can save time and reduce the risk of missing important deadlines or opportunities that can cost your extra dinero. Most importantly, by automating your finances you are setting yourself up for success, less stress, and hopefully a lot more money in your wallet. ¡WEPA!

Good luck, and may the best tax planner win!

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